Alex Chriss, the CEO of PayPal, said that it plans to cut 2,500 jobs or 9% from its global workforce this year.
In a memo sent to employees on Tuesday, the newly-appointed CEO explained that the decision had been made to “right size” the company by making both direct cuts and eliminating open positions throughout the year. Staff affected by this decision will be informed at the end of the next week.
Chriss stated in his letter that “we are doing this because we want to right-size the business and be able to grow at the pace needed to serve our customers.” The company did respond immediately to a comment request. In late afternoon trading, Paypal’s stock was up 0.5%.
Chriss announced in November that he would increase revenue beyond transactional volume, and pledged to make the fintech company leaner through a reduction of its cost base. The announcement helped boost the stock price after the third-quarter results. However, analysts continue to focus on PayPal’s margins.
Apple and other competitors have increased the pressure on Apple’s branded products, causing a slowdown in growth.
Investors are hoping that Chriss will revitalize PayPal’s share price. Chriss was a former senior executive of the software company Intuit. It dropped by almost 14% in the past year, missing a sector-wide recovery of high-growth tech shares.
Last week, payments company announced that it would launch new products based on artificial intelligence as well as an easy checkout option.
Block, the rival company led by Jack Dorsey (co-founder of Twitter), has also begun to reduce its workforce this week, as part of previously announced plans to reduce headcount and costs.